Gold set to record largest weekly drop in 3 months

19 May 2023 , 08:18 AM

On Friday, gold prices were headed for their worst weekly decline in 3-1/2 months as recent positive U.S. economic data and expectations for a resolution to the debt crisis dimmed the metal’s lustre.

Spot gold was unchanged at $1,959.15 per ounce, while U.S. gold futures nudged up 0.1% to $1,961.70.

Bullion was anticipated to experience its largest weekly decline since February, down 2.6%.

The labour market is still tight, as evidenced by the fact that fewer Americans than anticipated last week filed new applications for unemployment benefits.

After U.S. President Joe Biden returns from the Group of Seven conference in Japan on Sunday, he and House Speaker Kevin McCarthy, the leading Republican in Washington, aim to finalise a deal on the debt ceiling.

On Thursday, two Fed policymakers stated that the U.S. inflation does not appear to be declining quickly enough for the Federal to halt its drive to raise interest rates.

In the meantime, according to a Treasury Department statement, U.S. Treasury Secretary Janet Yellen reiterated the stability and strength of the nation’s financial system in a meeting with bank CEOs on Thursday.

In early Asian trading, the dollar index dipped 0.1%, although it was still close to a two-month high. For foreign investors, gold becomes less accessible due to a rising currency.

In other news, data indicated that Japan’s core consumer prices increased 3.4% in April compared to a year earlier as price increases widened. This raises doubt about the central bank’s prediction that inflation will fall back below its 2% target later this year.

Spot silver increased by 0.1 percent to $23.53 per ounce, platinum increased by 0.2 percent to $1,050.94, while palladium increased by 1% to $1,467.38.

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